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Bruce Holland

The curse of silos, slowness and small-thinking

I think silos may be the most universal problem facing large mature organisations. And most people don't realise how much pain they are causing or the cost to the organisation.
Silos cause slowness and small-thinking because people are focussed inward protecting budgets and power structures rather than focussing outward on customers and problem-solving.

1. Silos

Silos are nothing more than the barriers that surface between departments within an organisation, causing people who are supposed to be on the same team to work against each other. And whether this phenomenon is called departmental politics, divisional rivalry or turf warfare, it is one of the most frustrating aspects of life in any large mature organisation.

Where silos are strong I find infighting occurs to a high level and attention shifts drastically inward, away from issues such as customers and outcomes, toward battles over budgets, titles and responsibility for mistakes.

Silos are seldom a structural issue they are the result of poor thinking. Managers tend to respond to silos by reorganising but this is hardly ever the most important aspect or the place to start. What we need to do is change thinking

2. Slowness

According to Alvin Toffler, writing in Power Shift: since the end of World War 2 the world has been split into Capitalist and Communist, North and South, however today these old divisions no longer matter nearly as much as a new division: Fast and Slow. He says that historically power has always moved from the slow to the fast whether it was in species, nations or organisations.

Speed in organisations is determined by:

The speed of transactions

The speed of decision making

The speed with which new ideas are created

How fast ideas are bought to market

The velocity of capital flows

The speed which information and knowledge flows through the economic system.

All of these are cursed in an organisation suffering from silos.

They are cursed because, in silos, people focus inward, protecting boundaries and feeding egos rather than on the fleeting opportunities in the market place. It is becoming worse because there is no doubt that markets are speeding up. Those organisations that learn how to manage time will do better. The mass market is disappearing, and management that choose to ignore the implications of a faster market are increasingly being reduced to commodity- like competition.

Acceleration is happening so fast that people can perceive the change. For example, in the 1800s, things like electricity and photography took almost a century to commercialise. In the early 1900s, aeroplanes, and combustion engines took around a decade to commercialise. Now, we are looking at technologies that are out in a matter of years. Microchips are, now on a nine month cycle and they used to be on a two-year cycle.

3. Small-thinking

In silos people are focussed on themselves ("How can I get more?") or their teams, or their departments. Almost by definition people in silos are not working for the benefit of the organisation at large. Often people do things that seem beneficial at the lower level but destroy value from the whole. This includes fighting each other and competing with each other for resources and power.

Significant things can not happen when silos exist, people are just too busy maximising the parts. It is like a cancer that grows and grows for its own benefit without any regard to the body it is part of; and eventually it will kill the body.

4. The cost of silos

Organisations may have a first rate strategy; they may even have the skills to execute and yet still fail if the strategy is torpedoed because of silos and lack of trust.

Today the costs of silos are even greater because the world has entered a global knowledge worker economy that evolves around partnerships and relationships. This includes the ability to establish, grow, extend and repair interpersonal relationships at all levels of the organisation.

At the organisational level they separate work teams, departments and divisions. Silos make managers eager to defend their power, hoard capital and talent even when those resources could be better used elsewhere.

They cause people who are supposed to be on the same team to work against each other, paralysing performance. These factions breed office politics and infighting that cause stress and exasperation that ultimately kills productivity and pushes the best people towards the door.

Battles occur between the headquarters and the field office. And between marketing and engineering. And even within engineering, researchers and developers can be at war over who warrants more head count, budget dollars, and recognition for the success of products.

Instead of focussing on the results of the organisation, managers focus on:

Their own ego

Their status

Their teams

Their own departments.

As a result all work becomes piecemeal, diffused and unfocussed; in other words the exact opposite of "strategic".